With the price of fuel a major concern for businesses and employees alike, new analysis has shown that it is possible to cut annual petrol bills by as much as $520 each year.
In its annual report on petrol price cycles in Australia, the ACCC revealed that the difference between filling up at the high or low points of the relevant cycle can amount to hundreds of dollars each year.
“While they are not illegal, the retailers’ use of price cycles to maximise profits really infuriates drivers as they can see no reason for them to exist,” commissioner Mick Keogh said.
“It’s not uncommon for drivers to notice prices jumping 20 cents or more in a very short period of time, and the price you see being charged on the way to work can be very different to the one on the way home.”
Mr Keogh said that for vehicles that are not used frequently, it is possible to time the next trip to the petrol station at the lowest point of the price cycle — which can be below even the retailer’s cost price.
For higher-use vehicles, the convenience of filling up at the nearest service station can prove costly.
“There’s a common perception that all retailers put their prices up or down at exactly the same time, but our research shows this isn’t the case,” the commissioner said.
“So, if you see prices going up at one retailer, use an app to find another who hasn’t yet raised their price.”
Price cycles differ in each region
Contrary to popular belief, petrol price cycles are not uniform across the country, the ACCC analysis shows.
Perth drivers can achieve significantly bigger savings than cities on the east coast, for example, because it has regular weekly price cycles, making identifying the low point easier to pinpoint (prices are consistently cheapest on Mondays).
Given this, annual savings can add up to $520 for the average driver.
Longer price cycles in Sydney, Melbourne, Brisbane and Adelaide mean there are fewer low points, the report found, in turn reducing the achievable savings.
Still, costs can be shaved by $150 in both Melbourne and Brisbane, $175 in Sydney and $200 in Adelaide, the report found.
Retailers operate on different cycles
“Many people don’t realise there is also a significant difference between the cheapest and most expensive service stations throughout the price cycle, so purchasing petrol from those retailers that are consistently among the lowest-priced will save you money,” Mr Keogh said.
According to the report, the eastern capital cities and Adelaide used to see trough-to-peak price increases across all petrol retailers within just one or two days in 2009. But nowadays, this transition has increased to as much as a week.
That means that as the first retailers start hiking their price, motorists can take advantage of substantially lower prices at other retailers.
The report used the example of the average price of E10 in Sydney in 2017, which demonstrated a 9.5 cents per litre difference in price between the cheapest and most expensive major retailers.
Mr Keogh acknowledged that it is not always possible to determine when and where is cheapest — when you’re on empty, anything is better than nothing. Yet he urged motorists to shop around whenever there is the opportunity to do so, by using petrol price comparison sites ahead of time.
“Favouring the best-priced retailers sends a clear signal to petrol stations about what they need to do to get your business. The more people who do this means the more pressure there is on retailers to compete aggressively on price,” the commissioner said.
Veterans a smart choice for your business
By Adam Zuchetti
The business benefit: Going all-in on sustainability
By Adam Zuchetti
Analysis: How likely is an interest rate cut in June?
By Adam Zuchetti